Ordinance
of the Federal Audit Oversight Authority
on the Oversight of Audit Firms
(Oversight Ordinance FAOA, OO-FAOA)

¹ This Or­din­ance ap­plies to:

a.⁴

audit firms that provide audit ser­vices to pub­lic in­terest en­tit­ies and are sub­ject to the over­sight of the Fed­er­al Audit Over­sight Au­thor­ity;

b.

audit firms that have vol­un­tar­ily sub­jec­ted them­selves to the over­sight of the Over­sight Au­thor­ity.

² It reg­u­lates:

a.

the audit­ing stand­ards that must be com­plied with when audit ser­vices are provided;

b.

the Over­sight Au­thor­ity’s pro­ced­ure for in­spect­ing audit firms un­der state over­sight.

An­nu­al and con­sol­id­ated fin­an­cial state­ments that have been pre­pared in ac­cord­ance with the pro­vi­sions of the Code of Ob­lig­a­tions (CO)⁶ or any of the fol­low­ing re­com­mend­a­tions and reg­u­la­tions on ac­count­ing must be audited in ac­cord­ance with the Swiss stand­ards re­cog­nised by the Over­sight Au­thor­ity for audit­ing fin­an­cial state­ments is­sued by the Swiss Ex­pert As­so­ci­ation for Audit, Tax and Fi­du­ciary, Ex­pert­suisse (SA-CH), namely:

a.

the ac­count­ing re­com­mend­a­tions of the Com­mis­sion for Fin­an­cial Re­port­ing Stand­ards (Swiss GAAP FER);

b.

the ac­count­ing reg­u­la­tions of the Swiss Fed­er­al Fin­an­cial Mar­ket Su­per­vis­ory Au­thor­ity (FINMA) for banks and se­cur­it­ies firms (Art. 25–42 of the Bank­ing Or­din­ance of 30 April 2014⁷); or

c.

the FINMA ac­count­ing reg­u­la­tions for col­lect­ive in­vest­ment schemes (Art. 91 of the Col­lect­ive In­vest­ment Schemes Act of 23 June 2006⁸).

¹ An­nu­al and con­sol­id­ated fin­an­cial state­ments that have been pre­pared in ac­cord­ance with for­eign ac­count­ing stand­ards must be audited in con­form­ity with the audit­ing stand­ards, re­cog­nised by the Over­sight Au­thor­ity, of the In­ter­na­tion­al Audit­ing and As­sur­ance Stand­ards Board (IAASB).

² The Over­sight Au­thor­ity may re­cog­nise oth­er equi­val­ent audit­ing stand­ards.

³ An­nu­al and con­sol­id­ated fin­an­cial state­ments of com­pan­ies with their re­gistered of­fice in Switzer­land that have been pre­pared in ac­cord­ance with for­eign ac­count­ing stand­ards and audited in ac­cord­ance with for­eign audit­ing stand­ards must also be audited in ac­cord­ance with SA-CH.⁹

¹ Audit ser­vices un­der Art­icle 2 let­ter a let­ter 1 of the Audit Over­sight Act of 16 Decem­ber 2005¹⁰ (AOA) provided by com­pan­ies with re­gistered of­fice in Switzer­land that do not con­cern the audit­ing of an­nu­al or con­sol­id­ated fin­an­cial state­ments (spe­cial pur­pose audit en­gage­ments) must be provided in ac­cord­ance with the SA-CH and the Swiss audit­ing stand­ards of Ex­pert­suisse (AS).¹¹

² All leg­ally re­quired audit ser­vices provided by com­pan­ies with re­gistered of­fice abroad that do not con­cern the audit­ing of an­nu­al or con­sol­id­ated fin­an­cial state­ments (spe­cial pur­pose audit en­gage­ments) must, cor­res­pond­ingly, be provided in ac­cord­ance with for­eign audit­ing stand­ards pur­su­ant to Art­icle 3 para­graphs 1 and 2.

¹ Audit firms that ap­ply the SA-CH and the AS when provid­ing audit ser­vices un­der Art­icle 2 let­ter a let­ter 1 AOA¹³ must en­sure the qual­ity of their audit ser­vices in ac­cord­ance with the pro­vi­sions of the Swiss Stand­ard on Qual­ity Con­trol 1 (ISQC-CH 1).

² Audit firms that ap­ply the audit­ing stand­ards of the IAASB when audit­ing an­nu­al and con­sol­id­ated fin­an­cial state­ments must en­sure the qual­ity of their audit ser­vices in ac­cord­ance with ISQC-CH 1 and the In­ter­na­tion­al Stand­ards on Qual­ity Man­age­ment 1 and 2 (ISQM 1 and 2).

The Over­sight Au­thor­ity shall pub­lish a list of the re­cog­nised audit­ing and qual­ity con­trol stand­ards.

When provid­ing audit ser­vices un­der Art­icle 2 let­ter a num­ber 2 AOA¹⁶, the audit com­pan­ies must com­ply with the audit prin­ciples is­sues or re­cog­nised by FINMA.

¹ The Over­sight Au­thor­ity shall in­spect, in par­tic­u­lar, wheth­er:

a.

the li­cens­ing doc­u­ments and the an­nu­al re­port sub­mit­ted to the Over­sight Au­thor­ity are com­plete and cor­rect;

b.

the audit firm un­der state over­sight is com­ply­ing with the pro­vi­sions and stand­ards re­lat­ing to in­de­pend­ence, in­tern­al qual­ity con­trol and the audit ser­vices provided.

² If, dur­ing the pre­ced­ing in­spec­tion, meas­ures were agreed on or in­struc­tions is­sued with a view to rec­ti­fy­ing a situ­ation, it shall also in­spect the im­ple­ment­a­tion of and com­pli­ance with these.

Com­pli­ance with the ap­plic­able pro­vi­sions and stand­ards shall in prin­ciple be in­spec­ted in a risk-ori­ented man­ner.

Ad­vance no­tice of the in­spec­tion shall, as a rule, be giv­en to the audit firm. No­tice may be dis­pensed with if it is ne­ces­sary to do so in view of the pur­pose of the in­spec­tion.

¹ The audit doc­u­ment­a­tion must be suf­fi­ciently com­pre­hens­ive and de­tailed to al­low the Over­sight Au­thor­ity to ob­tain a pre­cise pic­ture of the audit car­ried out (Art. 730c OR¹⁸).

² Audit doc­u­ment­a­tion shall be un­der­stood to mean all re­cords that doc­u­ment the nature, time and scope of the audit pro­ced­ures per­formed, as well as their res­ults and the con­clu­sions drawn from them.

³ The doc­u­ment­a­tion on the qual­ity con­trol meas­ures in terms of Art­icle 12 AOA¹⁹ must be suf­fi­ciently com­pre­hens­ive and de­tailed to al­low the Over­sight Au­thor­ity to ob­tain a pre­cise pic­ture of the meas­ures taken and their im­ple­ment­a­tion.

⁴ The reg­u­la­tions on doc­u­ment­a­tion in the ap­plic­able audit stand­ards also ap­ply.

On the basis of the doc­u­ment­a­tion re­lat­ing to the mon­it­or­ing pro­cess car­ried out by busi­nesses, the Over­sight Au­thor­ity shall in­spect, in par­tic­u­lar:

a.

the pro­ced­ure em­ployed for the mon­it­or­ing pro­cess;

b.

the com­pos­i­tion and com­pet­ence of the teams car­ry­ing out the mon­it­or­ing;

c.

the cri­ter­ia used to se­lect the audit ser­vices mon­itored;

d.

the num­ber of audit ser­vices mon­itored in a fin­an­cial year;

e.

the res­ults of mon­it­or­ing activ­it­ies.

¹ The Over­sight Au­thor­ity shall in­spect the qual­ity of the audit ser­vices provided on the basis of, in par­tic­u­lar, the audit firm’s audit doc­u­ment­a­tion.²¹

² If the audit firm’s in­tern­al mon­it­or­ing pro­cess is ad­equate and can be in­spec­ted by the Over­sight Au­thor­ity (Art. 11), the Over­sight Au­thor­ity shall take this in­to ac­count dur­ing its in­spec­tion.

¹ The Over­sight Au­thor­ity shall pre­pare an in­spec­tion re­port.

² It shall give the audit firm an op­por­tun­ity to com­ment on the draft ver­sion of the in­spec­tion re­port.

³ It shall al­low the audit firm an ap­pro­pri­ate peri­od in which to do so, gen­er­ally 30 days.

¹ The Over­sight Au­thor­ity shall send the re­port to the audit firm’s highest su­per­vis­ory or gov­ern­ing body.

² Each mem­ber of the highest su­per­vis­ory or gov­ern­ing body must con­firm in­di­vidu­ally in writ­ing that he or she has taken cog­nis­ance of the re­port.

The Over­sight Au­thor­ity may con­duct pro­ceed­ings and is­sue de­cisions at any time, in par­tic­u­lar re­lat­ing to:

a.

the iden­ti­fic­a­tion of in­fringe­ments of ap­plic­able pro­vi­sions and stand­ards;

b.

the rec­ti­fic­a­tion of a situ­ation (Art. 16 para. 4 AOA²²);

c.

the im­pos­i­tion of sanc­tions.

¹ The audit firm’s highest su­per­vis­ory or gov­ern­ing body must, at the Over­sight Au­thor­ity’s re­quest, provide de­tails at any time on the status of the im­ple­ment­a­tion of agreed meas­ures or in­struc­tions is­sued to rec­ti­fy a situ­ation.

² In or­der to veri­fy the im­ple­ment­a­tion of and com­pli­ance with agreed meas­ures or in­struc­tions of the Over­sight Au­thor­ity is­sued to rec­ti­fy a situ­ation, the Over­sight Au­thor­ity may con­duct a fol­low-up in­spec­tion at any time. The pro­vi­sions of Sec­tion 3 ap­ply by ana­logy.

This Or­din­ance comes in­to force on 1 April 2008.